The state of Kedah in the early 20th century first gained fame as an Islamic development centre ensuing the deterioration of the Hindu-Buddhism influence. This was very much in evidence especially during the reign of Sultan Ab. Hamid Halim Shah during which a number of religious scholars rise to eminence such as Hj. Wan Sulaiman who formed Madrasah Hamidiah in 1920.
This school, named after Sultan Abd. Hamid Halim Shah grew rapidly as the centre of Islamic and Arabic learning in the northern parts of the Peninsula and had produced many religious teachers needed at the time.
This rapid development prompted a requirement for another school to accommodate increased enrolment as well as providing education at a higher level than the mere Standard Five taught at Madrasah Hamidiah. With the initiative of YM Tengku Mahmud Ibni Almarhum Sultan Ahmad Tajuddin who was the Regent at the time, a better equipped new school was built in 1936.
This school, located in Simpang Kuala, Alor Setar came to be known as Al-Maahadil Mahmud or Maktab Mahmud named after the Regent YM Tengku Mahmud.
The College was governed by an Advisory Committee appointed by the consent of the Sultan of Kedah. The Menteri Besar normally stands as the Chairman of the Advisory Committee with the college Headmaster as Secretary. The committee members were appointed from amongst the religious scholars and the Sheikhul Islam, and its administration was under the office of the Kedah Islamic Religious Affairs.
Maktab Mahmud as a premier religious school, definitely needs strong financial resources to manage. At its inception, the college was funded by the Kedah Zakat Department. Besides zakat, the college possesses its own land, donated by local philanthropists totalling approximately 83 acres, endowed to the college. Through these resources the college is able to increase its finance to fund students to the Middle East.
Admission to this college is also quite different from other schools. Students wishing to enter Maktab Mahmud need to fill a special form issued by the College. Amongst the main conditions to apply are students must not be less than 13 ½ years old and must have passed Standard 5 or 6 of the National Primary School or National Type Primary School, and can read the Quran. Even if the conditions are met, the candidates who apply will also be interviewed by a Selection Committee to determine whether the candidate succeeds in being accepted into the college.